Dinn, Hochman & Potter, LLC

Can you be bound by an advertisement?

Everyone has a friend of a friend with a horror story of being taken to court by a customer that took a particular advertisement too far. This article will address the legal implications of advertisements and how they may affect your business. But, the short answer is that advertisements typically cannot and do not create offers that are binding on you or your company.

No one thinks about this, but when and how a contract is formed is critical to determine the parameters of the contract. The basic contract requires someone to make an offer and another person to accept that offer and for an exchange of "consideration" (or something for something). Once acceptance occurs, a contract has been formed. In reality, the way these various factors come to life is fluid and depends on the situation.

Some people try to argue that advertisements constitute a valid offer and thereby can be accepted. But advertisements are generally considered invitations to negotiate and not actual offers. An invitation to negotiate means that customers are invited to come to your business to make purchases. It is not a legally binding agreement. It would make the marketing business incredibly unwieldy if every advertisement containing hyperbolic language constituted an offer.

Don't let this lead you to draft advertising campaigns that make wild or unjustified claims. Your advertisements must be reasonable and somewhat based in fact. If your campaigns get too wild, you could be subject to false advertising lawsuits.

If you are the subject of a lawsuit by an overzealous customer, then you may want to contact a commercial litigation attorney.

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